The Underestimated Importance Of Firing People

“The trouble with human nature is that there are too many people connected to it.” -Milton Berle

When you want to save a hammock of endangered hardwoods, you start by chopping down a lot of trees. You must get rid of the younger, faster-growing trees that threaten the good wood in order to let the sun come in and give the really valuable growth a chance to develop. That is how it works in nature. The nature of a business is not too much different.

A Successful Newsletter Publisher I Know in Tampa Told Me This Story.

He had 25 employees and was getting pressure from his top people to hire more help. His overhead was skyrocketing, and profits, as a percentage of revenues, were shrinking. He was working harder than ever, yet enjoying it less. The main reason for that, he knew, was that he resented the time he spent managing people and figuring out management systems. What he really wanted to do was to write and edit his newsletter, along with the promotions that sold it.

The bottom line, he told me, is that I felt like the business was getting away from me.

One day he ran across an article in which a very successful businessman who was asked for the secret of his many accomplishments, replied, Youll have to ask the people who work for me. It is they who have accomplished everything I am credited for.

B.S., he thought. Successful people create their own success. This is just an obvious case of employee relations. And then he remembered the story of Henry Ford, who, when asked how a certain technical aspect of the assembly line was performed, replied, I have no idea  but I know the phone number of the man who can answer that question.

A Very Clever Plan . . . Some Astonishingly Good Results

Then he thought about it some more . . . and thought about his own situation and the troubles he was having with his employees . . . and concluded that if great employees really do make businesses great, perhaps mediocre employees are the cause of mediocre business results.

He then set upon the following long-term experiment.

He moved out of his office and sat among the employees. With every new person he agreed to hire, he made himself a promise that he would fire somebody. By situating himself among his workers, he was able to identify employees he thought were weak. He didnt know exactly what sort of negative behavior he was looking for, but he found himself targeting employees with attitudinal problems (those who seemed always unhappy) and problem workers (those who spent too much time on the phone, on breaks, etc.).

The plan was to fire the worst employee for each new person hired. By doing so, he reasoned, the caliber of his workforce would gradually improve, so long as each new hire was better than his worst existing employee.

The program worked so well that an amazing thing happened. Not only was he able to get rid of laggards and sour apples, but the process vastly improved the feeling and energy of the workplace itself. More work was being done more quickly.

As time went on, he and his execs realized they were overstaffed. Instead of letting only the weakest employees go, he began dismissing two at a time. Within 18 months, he had reduced his staff to 14 people and profits and revenues were way up. More importantly, there was a very positive feeling around the office . . . and he had recaptured the time he wanted to do the work he loved.

The only difficult thing, he told me, was learning how to fire someone. I recognized it was the fear of doing so that allowed me to tolerate those mediocre people all along. The first few dismissals were difficult, but after that it became easier. Eventually, I came to feel I was doing something good for the company, good for me and good for the hard-working, serious-minded employees who didnt want to be slowed down by mediocre people.

What You Do For Love . . . What You Neglect To Do Out Of Fear

I was reminded of this story just last week when one of the companies I work with hired a new customer service manager to replace one who had quit. The woman who left was considered good but not great. The woman who replaced her was younger and less experienced but more enthusiastic. Within a week of the change, everybody was remarking how much better customer service had become under her management. More work was getting done. The customer service reps were happier. And all the numbers were getting better. All this improvement from a single personnel change  and one that was not even seen as needed!

I could tell you dozens of similar stories from my own experience. From secretaries to CFOs, the difference between one employee and another can be enormous. Time after time, Ive put up with ordinary levels of performances, middling intellects, and passable personalities, only to be thoroughly shocked and pleased by how much better I did after those so-so sorts up and left me.

The Lesson, Of Course, Is That You Cant Underestimate The Importance Of The People Who Work For You.

My advice is to hold a high standard for your employees and maintain that standard by weaning your staff of second-rate people. This applies equally to those you do business with: your vendors, your suppliers, your brokers, and all the people who should help your business work.

Put This On Your To-Do List . . .

Do yourself a favor. Write down, right now, a list of the top 10 people on whom you rely to make your business successful. Include whoever counts. The list could include your banker or your lawyer. Your CFO or your secretary. It could even include a salesperson or a supplier. Whoever.

Complete the list and then highlight the top three people  those you are thoroughly pleased with; then highlight the bottom three  those you are most uneasy about. Then make yourself a promise. Sometime in the next 30-60 days, you are going to replace one of those three people with someone better. You may have to fire someone you have employed for many years. You may have to stop doing business with your wifes brother. You may have to fire your wife.

It wont be easy . . .and you may doubt your decision at first, but I guarantee that before you know it, you will be telling yourself that you have just made one of the best decisions of your business life. You will feel better about yourself, more confident about your business and more optimistic about the future.

Enjoy guests like Lewis Howes, Bedros Keuilian, Brad Pilon, Carrie Wilkerson, and other inspirational entrepreneurs and authors. Plus, get insider tips on how to make the most of your mornings, kickstart your productivity, and set goals you can actually achieve!

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